THE time is ripe for Australia to give the tobacco industry another black eye, say Australian tobacco control experts, who are encouraging state and federal governments to sue for the recovery of health care costs.

In 2008, Collins and Lapsley estimated that smoking cost the Australian health care system, directly and indirectly, around $31.5 billion annually. According to some experts, that cost is now closer to $50 billion a year.

The direct costs of caring for someone ill with a smoking-related disease is one thing, says Dr MacKenzie, but the indirect costs must also be considered.

“What about the impacts on households if the key income earner dies – childcare costs, perhaps the need for relocation, increased transport costs, home help – people who die from smoking-related cancers, for instance, don’t die quickly in many cases.”

Australia leads the world in tobacco control measures, but around 2.5 million of us still smoke, and 15 000 of us are dying every year from diseases that are “completely preventable”, according to Dr MacKenzie.

He is the co-author of a Perspective published in the MJA calling on state and federal governments to consider suing the tobacco industry for smoking’s imposition on our health care system.

“It’s a very good time to do it,” Dr MacKenzie said.

“The industry is slightly on the defensive in some ways because they’ve had a few legal setbacks internationally. It has lost all of its plain packaging challenges [in Australia, the UK, Ireland and France] and it lost a decision in the European Court of Justice recently.”

Speaking in an exclusive podcast with MJA InSight, Dr MacKenzie said that complacency was not something Australia could afford.

“You can have a really big win, as Australia did with plain packaging, but afterwards not only is there exhaustion among the tobacco control community and affiliated government workers, there’s often a policy inertia,” he said.

“There’s a lull, a sense that that’s been done. But the tobacco industry never takes that attitude. They’re incredibly sophisticated and aggressive.

“We can’t really let up. We must maintain the momentum if we want to get this figure [of 15 000 people dying each year from smoking-related diseases] down.”

Canada provides a good model for Australia to follow, the Perspective authors wrote.

“Lawsuits recently filed by Canadian provinces may provide insights and lessons more relevant to Australia, as our legal system is more similar to Canada’s … British Columbia’s tobacco-specific cost recovery legislation established a precedent that changed the legal landscape.

“The remaining provinces have subsequently filed lawsuits to recover billions of dollars in compensation; Ontario and Quebec, for instance, are seeking CAD$50 billion and CAD$60 billion in damages respectively.”

There were lessons to be learnt from Canada that could make the litigation pathway faster and less obstacle-ridden for Australia, Dr MacKenzie said.

“The tobacco industry challenged the British Columbia lawsuit immediately because they said [the lawsuit] was unconstitutional. British Columbia had to then write legislation to make it constitutional, which the Supreme Court then upheld.

“So, the first step here should be to put in place legislation that guarantees that [suing the tobacco company] is a constitutional act.”

A second critical issue was making sure that the right people were being sued, Dr MacKenzie and his colleagues wrote.

“A major recovery in Australian litigation could potentially push an Australian subsidiary of a global cigarette manufacturer into bankruptcy, depriving plaintiffs of the opportunity to recover full damages,” they wrote.

“This potential risk of bankruptcy would make it imperative that the parent companies remain as defendants in legal actions in order to satisfy the large damage awards necessary to provide just financial compensation.”

So, given the costs and time involved – British Columbia is coming to the end of a 17-year process to recover health care costs – is litigation worth it?

“The reality is that the Australian Government has paid out billions of dollars in health care costs directly associated with smoking,” Dr MacKenzie told MJA InSight.

“If we don’t sue them, we’re letting the tobacco industry get away with something they knowingly created and generated.

“It would be great to stamp on people the idea that this industry is completely corrupt and has knowingly created this product and made billions of dollars, even in the small Australian market.

“This is a way of dealing retrospectively with tobacco industry wrongdoing.

“It would be complex, it would be difficult … but that’s simply the reality of dealing with a much better resourced opponent.

“The industry will do everything they can to delay and test the resolve of the parties going after the money, but ultimately it does work.

“It may take a long time, but it’s worth doing. We should make [the tobacco industry] dislike us even more.”

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Australian state governments should sue the tobacco industry for the recovery of healthcare costs

8 thoughts on “Suing Big Tobacco for health care costs: time for action”

This initiative should be strongly supported. Since JM Keynes, we’ve been told that modern economics needs to take account of ‘externalities’ (ie. costs inflicted by producers of a product in the promotion/sales of that product) for the system to work properly, but for years this has been ignored by economists and implicitly supported by manufactures and politicians alike. Using tobacco as a test case, it would make producers think more carefully and get good backing evidence before proposing/developing products that 19th Century scholar John Ruskin referred to as ‘illth’ objects (ie. those that cause harm or are socially undesirable, but have value in exchange). It may perhaps even make our current generation of ‘shock jocks’ more careful in spruking their so-called ‘knowledge’ on various topics such as climate change.

sue the government who get the excise on cigarettes !
sue the patients who made a personal decision to smoke!
Stand up and smell the roses – accept personal responsibility for smoking and consequences. If government was serious , ban cigarettes!

Since the mid eighties, the cost of treating smoking related illness has exceeded the excise garnered by government on tobacco. It would seem a no brainer to ban cigarettes completely or at least treat them as a prohibited import or even make them an S8 drug available for those so addicted.

I would be more enthusiastic about suing if I thought there was any prospect of a quick result. The problem is that the case would inevitably drag on for years and the only beneficiaries would be the lawyers.

A desire to sue because some ‘think’ that the costs of smoking are much higher than has been found in the actual research, and a desire to change Constitutions just so that tobacco companies can be sued(!), is not good public policy. Let’s see a new study that actually quantifies these claimed additional externalities, compare that newly calculated cost to what has previously been found to be a huge subsidy to government coffers by smokers paying for their additonal ‘burden’ on healthcare costs (by a factor of 5:1, smokers last decade were over-paying for these costs), debate the merits of who should pay for such things as the incremental increase in welfare costs for children from a prematurely dead parent who chose to smoke despite decades of informed consent, and go from there. Until these things happen, calls for lawsuits are rank opportunism (relying on ignorance of the public in this debate) and ideologically implies a massive increase in paternalism.

I would be thinking that to sue tobacco companies that use the same advertising to lure young people into smoking e-cigarettes, might finally get the message that it is not a good idea to push these on to the vulnerable in Australia (when we find out the damage they do), and sue them for that as well.

However, Australia is not exactly flush with spare cash to take on litigation. I agree with Dr Bill McWhirter that probably the only beneficiaries would be the lawyers, and would add, future addictive people, when they are no longer available in any shape or form.

But the fact is, this is the tip of the iceberg. For example, prescription medication is being blamed for Australia recording its highest number of drug-induced deaths since the 1990s. (Some were suicides but the ABS said the overwhelming number were accidental.)

Death rates from illicit drugs have also increased, with the death rate from drugs such as methamphetamines and ice quadrupling since 1999. In total, there were 158,504 deaths in Australia in 2016. Somewhere along the line, we need to get the message out there about the dangers of drug use.

Smoking is a personal choice. But with choice, like freedom, comes responsibility.
Smokers are aware of the problem inherent to it yet continue on.
To go after manufacturers of cigarette & be able to make them accountable maybe a move to help cover the cost of its impact on health but it can argue like any other legitimate business (like alcohol) that is was a personal decision to have this vice.
Ban cigarette altogether (even with online shopping) or make the cost far more expensive or make smokers pay for the smoking induced health problem (especially even after they have been warned).

We are about to see codeine regulated as a prescription only item, due to its adverse health effects.

Do the same with nicotine – problem solved. It’s an addictive vasospastic agent, with no real therapeutic indication (maybe ulcerative colitis), but preventing new addicts would be a great public health measure.

Lawsuits are a nice concept, because we all want to punish the evil drug lords who profit from human misery, but it’s an inefficient way of dealing with a cashed-up opponent with nothing to lose. And I suspect our spineless politicians lack the resolve for a Duterte-style war on drugs, but it would be amusing to read that the SAS had stormed the Coles and Woolies boardrooms and summarily executed all the directors…

It always puzzles me that Americans are too stupid to ban guns after yet another massacre, but then I see a teenager smoking and bemoan the failure of our pollies to protect our children.